SRELAKSHMI CASHEW COMPANY v. STATE OF KERALA & OTHERS

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC FRIDAY, THE 9TH APRIL 2010 / 19TH CHAITHRA 1932 WP(C).No. 32764 of 2009(M) -------------------------- PETITIONER(S): - --------------- SRELAKSHMI CASHEW COMPANY, REP.BY MANAGING PARTNER P.SUNDARAM, LAKSHMI PRABHA, KADAPPAKADA P.O., KOLLAM - 691008. BY ADV. SRI.N.D.PREMACHANDRAN SRI.D.AJITHKUMAR ## RESPONDENT(S): - --------------- 1. STATE OF KERALA - REPRESENTED BY SECRETARY TO LABOUR & REHABILITATION, THIRUVANANTHAPURAM. 2. THE JOINT DIRECTOR OF FACTORIES & BOILERS, OFFICE OF THE FACTORIES & BOILERS KOLLAM. 3. INSPECTOR OF FACTORIES & BOILERS, KUNDARA. ADDL. R4 TO R8 4. EZHUKONE SATHIAN, GENERAL SECRETARY, KERALA STATE CASHEW WORKERS FEDERATION (KSTUC), EZHUKONE P.O., KOLLAM 5. P.PRAKASH BABU, SECRETARY, ALL KERALA CASHEW NUT FACTORY WORKERS' FEDERATION (UTUC), KOLLAM-13 6. MURALI MADANTHAKODU, GENERAL SECRETARY, KERALA CASHEW WORKERS' CENTRE (CITU), CPM AREA COMMITTEE OFFICE, EZHUKONE P.O., KOLLAM 7. FASALUDEEN HUK, SECRETARY, KASUANDI THOZHILALI KENDRA COUNCIL (AITUC), KADAPAKKADA, KOLLAM 8. V.SATHYA SEELAN, GENERAL SECRETARY, KERALA KASUANDI THOZHILALI CONGRESS (INTUC), RAJIVJI BHAVAN, EZHUKONE P.O., KOLLAM (Impleaded as per order dated 5.4.10 in I.A.4948/10) ## GOVERNMENT PLEADER SRI.M.P.HOOD SRI.A.A.ABUL HASSAN FOR ADDL.R4. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09/04/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 32764 of 2009 APPENDIX ## EXHIBITS EXT.P1COPY OF THE INTERIM ORDER PASSED BY THE HONOURABLE SUPREME COURT DATED 27.9.01 - EXT.P2A COPY OF THE JUDGMENT OF THE HONOURABLE SUPREME COURT DATED 16.3.09 - EXT.P3COPY OF THE SALE AGREEMENT DATED 4.6.09 - EXT.P4A COPY OF THE LICENCE OF THE CASHEW FACTORY DATED 2.1.09 EXT.P5COPY OF THE REQUEST FOR TRANSFER, AMENDMENT AND RENEWAL DATED 9.9.09 - EXT.P6A COPY OF THE FORM NO.2 APPLICATION FOR TRANSFER AND RENEWAL DATED 8.9.09 - EXT.P7A COPY OF THE CONSENT LETTER ISSUED BY SMT.SALIHA BEEVI DATED 7.9.09 - EXT.P8A COPY OF THE UNDERTAKING BEFORE THE RESPONDENTS - EXT.P9A COPY OF THE CHELAN FOR REMITTING RS.5000/- DATED 9.9.09 - EXT.P10A COPY OF THE CHELAN FOR REMITTING RS.9000/- DATED 8.9.09 - EXT.P11A COPY OF THE SALE DEED DATED 24.9.09 - EXT.P12A COPY OF THE LICENCE DATED 14.1.05 - EXT.P13A COPY OF THE LICENCE - EXT.P14A COPY OF THE INTERIM ORDER DATED 5.11.09 IN W.P.(C).25922/09 - EXT.P18A COPY OF THE COMMUNICATION DATED 17.11.09 ISSUED BY THE 2ND RESPONDENT - EXT.P19A COPY OF THE EXPLANATION FILED BY THE PETITIONER DATED 30.11.09 - EXT.P20A COPY OF THE ORDER DATED 5.12.09 ISSUED BY THE 2ND RESPONDENT - EXT.P21A COPY OF THE NOTARY ATTESTED DECLARATION DEED DATED 15.1.10 - EXT.P22A COPY OF THE COVERING LETTER DATED 18.1.10 (TRUE COPY) P.A TO JUDGE ANTONY DOMINIC, J ------------------W.P.(C).32764/2009 -------------------Dated this the 9[th] day of April, 2010 ## JUDGMENT When this case came up for consideration on 08.04.2010, at the request of the counsel for additional 6[th] respondent, the case was adjourned to 09.04.2010, when again, request was made for adjournment to file counter affidavit. However, this request was opposed by counsel appearing for the petitioner. Having regard to the urgency pointed out by the learned counsel for the petitioner and also since an adjournment as sought for by the additional 6[th] respondent was already granted, the request was turned down. Thereafter, the counsel for the petitioner, Learned Government Pleader for respondents 1 to 3 and counsel for Addl. Respondents 4 and 6 were heard. 2. The main prayer sought is to quash Ext.P20 order passed by the 2[nd] respondent rejecting the applications made by the petitioner for transfer and renewal of the licence granted to a Cashew Factory. 3. Ext.P4 is the licence issued by the Department of Factories and Boilers in favour of Smt. Saliha Beevi, bearing Reg. W.P.(C).32764/09 2 No. CHW/KUR/11/75/88 in respect of National Cashew Company, Ezhukon, Kollam. Based on a sale agreement entered into between the petitioner and Smt. Saleeha Beevi, a copy of which is Ext.P3, petitioner submitted Ext.P5 request for transfer, amendment and renewal of the licence, enclosing Ext.P6, application for transfer and renewal and Ext.P7, the consent issue by Smt. Saleeha Beevi. Along with Exts.P5 to P7 petitioner also submitted Ext.P8, a letter undertaking the liability in respect of the employees of the establishment, which reads as under: ## “UNDERTAKING The factory by name National Cashew Company, Ezhikone bearing license and registration no. CHW/KUR/11/75/88 was under the occupiership of T. Saliha Beevi, Blue bells, Kilikottor P.O., Kollam. Now we have applied for transfer of licence on our favor to confirm to the previsions of Sec 25 FF of the Industrial Dispute Act, 1947, we hereby give the following undertaking: 1. That the service of the workmen employed under National Cashew Company, Ezhukone, will not be interrupted by transfer. 2. That the terms and conditions of service applicable to the workmen after such transfer will not be in any way less favourable than those applicable to them immediately before the transfer and 3. That we/I P. Sundaran, Managing Partner, Sreelekshmi, Cashew Company terms of such transfer or otherwise are legally liable to pay to the workmen in the event of their retrenchment compensation on the basis that their service has not been interrupted by the W.P.(C).32764/09 3 transfer. 4. I hereby undertaken the responsibility to pay Leave with Wages, Contribution to PF, Relief and Welfare Fund and all other rightful privileges of the workers previously employed or presently employed. Yours faithfully, For SREELEKSHMI CASHEW COMPANY, Sd/- Managing Partner ## Witness 1. Laiju G. dath, Laiju Nivas, Asramam, Kollam – 2 Sd/2. K.S. Sajeevalal, Ruby cottage, Sreenivasapuram P.O., Varkala Sd/-” The application was considered by the 2[nd] respondent and was rejected by Ext.P20 order. The reasoning of the 2[nd] respondent for rejecting the application are the following: “The undersigned inspected the factory on 10/12/2009 along with Sri. Nitheesh Devaraj, Inspector of Factories and Boilers, Kundara and observed the following. 1. It was seen that the factory premised was separated into two parts by a compound wall. The buildings of the existing factory were seen located in both sides of the wall. Sri.P. Sundaran had purchased only a part of the premises and buildings of the existing factory, National Cashew Company, by the Sale Deed No.2330/2009 dated 24/09/2009 of the Sub Registrar, Kilikolloor. It is learned that the remaining premises and some buildings which were used as lunch room, rest room, godown, toilets etc., of the National Cashew Company are located outside the southern side of the property of Sri.P. Sundaran. It is also learned that this part on the southern side was sold to Sri. Thampu by Smt. Saliha Beevi, the occupier of the National Cahsew Company. That is, Sri. P. Sundaran is not having the possession of the entire premises and factory buildings of the National Cashew W.P.(C).32764/09 4 ## Company. 2. Only seven toilets are seen provided for the women workers. The actual requirement is 20 toilets for 500 women workers. Doors are not seen provided for the existing toilets. Water supply is also not provided in the existing toilets. 3. It was also noticed that one building of the factory in the western side of the premises found completely damaged with the roof and structure completely collapsed and unfit for functioning the factory. Sri.P. Sundaran has failed to produce the agreement as per 25 FF of the Industrial Disputes Act. He is not having the possession of the entire premises and buildings of the National Cashew Company. The toilets provided are insufficient in number and not properly maintained. One building of the factory in the western side of the premises found completely damages and unfit for functioning the factory. In these circumstances, the application submitted by Sri. P. Sundaran for transferring the licence of the National Cashew Company bearing Regn. No. CHW/KUR/11/75/88 in his name and amending the name of the factory as Sreelekshmi Cashew Company is hereby rejected. ## Sd/- SENIOR JOINT DIRECTOR” It is challenging Ext.P20 and to direct that the fresh orders be passed, this writ petition is filed. 4. In so far as the alleged failure of the petitioner to produce agreement under Section 25FF of the Industrial Disputes Act is concerned, as already seen, Ext.P8 is the undertaking furnished by the petitioner, undertaking the liabilities in respect of the workman of the industry. Section 25FF of the I.D.Act provides that were the ownership or management of an W.P.(C).32764/09 5 undertaking is transferred, every workman who has been in continuous service not less than 1 year in that undertaking, immediately before such transfer, shall be entitled to notice and compensation in accordance with Section 25F, as if the workman had been retrenched. The proviso to the Section is to the effect that nothing in the Section shall apply to a workman in any case where there has been a change of employers by reason of the transfer, (a) if the service of the workman has not been interrupted by such transfer; (b) where the terms and conditions of service applicable to the workman after such transfer are not in any way less favourable to the workman than those applicable to him immediately before the transfer; and (c) under the terms of such transfer or otherwise, the new employer is legally liable to pay to the workman, in the event of his retrenchment, compensation on the basis that his service has been continuous and has not been interrupted by the transfer. 5. Ext.P8 shows that the undertaking given by the petitioner satisfied the conditions prescribed in the proviso to Sec. 25 FF and as a result thereof, Section 25FF has no applicability to the situation obtaining in this case. Neither in the W.P.(C).32764/09 6 Factories Act nor in the Industrial Disputes Act is there any provision that an undertaking cannot be acted upon and that an agreement between the management and the workman alone can be acted upon. If this be the position, the finding of the 2[nd] respondent that the petitioner has not produced agreement under Section 25FF of the ID Act and therefore the application made by him is liable to be rejected is erroneous and is illegal. 6. In so far as the other inadequacies pointed out by the 2[nd] respondent are concerned, Learned Counsel for the petitioner submits that the defects have all been rectified and that documents substantiating this fact, have been produced before the 2[nd] respondent. It is also his contention that if the 2[nd] respondent wants any further material to substantiate this claim of the petitioner, they are willing to produce to such additional material also. 7. The learned Counsel appearing for the trade unions contended that Section 33 of the ID Act is violated. In my view, this contention is misconceived. Violation of Section 33 or any provision other than section 25 FF of the ID Act has not been relied on in Ext.P20. The validity of otherwise of an executive W.P.(C).32764/09 7 order has to be judged in the light of the reasons stated in the order itself and reasons cannot be supplemented through affidavits or otherwise. It has been so held by the apex court in Mohinder Singh Gill v. Chief Election Commr. (AIR 1978 SC 851). Since violation of Section 33 is not a ground relied on in Ext.P20, in view of the above principle laid down by the apex court, the contention raised by the counsel for the trade union is only to be rejected and I do so. 8. For the aforesaid reasons, I quash Ext.P20 and dispose of the writ petition with the following directions. - 1) The 2[nd] respondent shall reconsider the application made by the petitioner for transfer, amendment and renewal of Ext.P4 licence in the light of the findings in this judgment. While passing orders the 2[nd] respondent shall consider the documents produced by the petitioner to show that the deficiencies pointed out in Ext.P20 are rectified. - 2) It will be open to the 2[nd] respondent to call upon the petitioner to produce any additional document and also to inspect the factory premises. - 3) On completing this process, final order on application W.P.(C).32764/09 8 made by the petitioner shall be passed with notice to the petitioner and the trade unions as expeditiously as possible, at any rate within 4 weeks of production of a copy of this judgment. ANTONY DOMINIC, JUDGE